Ron Paul: The Phony Job Recovery – OpEd

Last Friday saw the release of a bombshell jobs report, with headlines exclaiming that the US economy added over 250,000 jobs in July, far in excess of any forecasts. The reality was far more grim. Those “jobs” weren’t actually created by businesses – they were created by the statisticians who compiled the numbers, through the process of “seasonal adjustment.” That’s a bit of statistical magic that the government likes to pull out of its hat when the real data isn’t very flattering. It’s done with GDP, it’s done with job numbers, and similar manipulation is done with government inflation figures to keep them lower than actual price increases. In reality there are a million fewer people with jobs this month than last month, but the magic of seasonal adjustment turns that into a gain of 255,000.

Delving further into the jobs report, we see that many of the jobs that were supposedly created were jobs in government and health care. Government jobs, of course, are paid for by siphoning money away from taxpayers. And health care jobs are increasingly created solely because of the ever-growing mandates of Obamacare. Other major sources of job growth were temp jobs and leisure & hospitality (i.e. waiters and bartenders). These aren’t long-lasting jobs that will contribute to economic growth, they are mostly just jobs that cater to the tastes of the well-to-do who continue to benefit from the Federal Reserve’s easy monetary policy.

As New York, San Francisco, Washington, DC, and other political and financial hubs continue to benefit from trillions of dollars of debt-financed government spending and the trillions more dollars the Federal Reserve has created from nothing, the politicians, lobbyists, and bankers who receive that money demand ever more exotic food, drink, and entertainment. The jobs that arise to satisfy that demand, we are supposed to believe, are the backbone of the job market “recovery.” Yeah, right.

Eight years after the worst part of the last financial crisis, the US economy still has not fully recovered. The number of people employed may have finally begun to grow past its pre-crisis peak but the quality of jobs has deteriorated, and the number of people who are still looking for jobs or who have even given up looking for jobs and dropped out of the labor force still numbers in the millions and shows no signs of shrinking. Quantitative easing, zero or negative interest rates, and other inflationary central bank policies cannot lead to lasting job creation or economic growth. Try telling that to the central bankers, though. They only care about aggregate numbers, not what is actually behind those aggregates. A castle built of sand is the same to them as a castle built of stone.

Until the notion that wealth and prosperity can come from a printing press is eradicated from the thinking of policymakers, economies around the world will remained mired in this malaise. Jobs are created by meeting consumer demand. If you provide the goods and services that customers want at the price they want, your business will grow, jobs will be created, and everyone in society will be better off.

If, on the other hand, jobs are created through government money creation and heavily protectionist laws and regulations, those jobs will not meet the needs of consumers, will add nothing to productivity, and ultimately will not last. When politicians pursue policies that incentivize jobs like the latter to those of the former, economic stagnation is the unfortunate but predictable result.
This article was published by RonPaul Institute.

Ron Paul

Ronald Ernest "Ron" Paul (born August 20, 1935) is an American physician, author, and politician who served for many years as a U.S. Representative for Texas. He was a three-time candidate for President of the United States, as a Libertarian in 1988 and as a Republican in 2008 and 2012.

2 thoughts on “Ron Paul: The Phony Job Recovery – OpEd”

President Obama has increased national debt by more than ten trillions, but this huge debt has created phony or fictitious economy. More than 100 million Americans have no jobs. This is a basic result of his reckless foreign policy which has bankrupt the American people and the American economy. Obama’s economy has not generated economic growth rate more than three percent over the last eight years. Productivity and growth have been stagnated. Militarism and foreign wars do not help the economy and people but do benefits oil corporations, the rich, and the military industrial complex. Obama’s economy is fictitious and based on finance, derivatives, and debt, rather than production and employment. Still President Obama has a big mouth and criticizes others for his failure. He has helped terrorist organizations but terrorism has destabilized the world and now his administration spends huge funds for national security. Yet, he thinks he is the best president. Allah knows best.

The 255’000 jobs will likely disappear largely come September. What was left out is that many of these jobs were tourism related. Hence waiters, “professionals” – namely people supervising beaches, national parks etc. – and tour guides, drivers and other hospitality employees. But these jobs will cease come September and the waning of the tourist season. They did say architect jobs increased, but noted no increase in construction jobs. But from design to construction there is a time lag – i.e construction isn’t likely to increase until next year. They noted an increase in inventories -again that points to tourism as the consumer of that inventory. Which means, all in all, Ron Paul is right. The jobs numbers were an electoral tool to boost Hillary as Obama’s successor, not the economy.